Standing Committee E

Mr. Roger Gale in the Chair]

Communications Bill

Roger Gale: Good morning. Welcome to what I am sure will be a fairly lengthy but harmonious and productive series of debates. Before we commence, I shall mention a few housekeeping matters. So long as I am in the Chair, hon. Members have permission to remove their jackets, if they wish to do so in this weather. On accommodation, I am advised that no other Room is available this morning, but we are negotiating to move to a slightly larger Room. The Chairman does not address the Public Gallery because we do not recognise it, but hon. Members may wish to inform friends and guests that we hope that we will be able to accommodate more people in future.
 I should like formally to tell the Committee that the Programming Sub-Committee met last night and came up with the programme motion before us. I made it plain at the meeting—and I have discussed the matter with Mr. Atkinson—that, should it be necessary, I will reconvene the sub-committee as its Chairman. That may not prove necessary, but hon. Members on both sides of the House have agreed that we should have that level of flexibility.

Kim Howells: I beg to move,
That— 
 (1) during proceedings on the Communications Bill (in addition to its first meeting at half-past Ten o'clock on Tuesday 10th December 2002) the Standing Committee do meet— 
 (a) on Tuesday 10th December 2002 at half-past Four o'clock; 
 (b) on Thursday 12th December 2002 at five minutes to Nine o'clock and at half-past Two o'clock; 
 (c) on Tuesday 17th December 2002 at half past Ten o'clock and at half-past Four o'clock; 
 (d) on Thursday 19th December 2002 at five minutes to Nine o'clock; 
 (e) on Tuesday 7th January 2003 at half-past Four o'clock; and 
 (f) thereafter on Tuesdays and Thursdays at five minutes to Nine o'clock and at half-past Two o'clock; 
 (2) the proceedings to be taken on the sittings shall be as shown in the second column of the Table below and shall be taken in the order so shown; 
 (3) the proceedings which under paragraph (2) are to be taken on any sitting shall (so far as not previously concluded) be brought to a conclusion at the time specified in the third column of the Table; 
 (4) paragraph (2) does not prevent proceedings being taken (in the order shown in the second column of the Table) at any earlier sitting than that provided for under paragraph (2) if previous proceedings have already been concluded. 
TABLE  SittingProceedings  Time for conclusion of proceedings  1st  Clauses 1 and 2, Schedule 1, Clauses 3 to 26, Schedule 2 and Clause 27  —  2nd 1 and 2, Schedule 1, Clauses 3 to 26, Schedule 2 and Clause 27 (so far as not previously concluded)  —  3rd 1 and 2, Schedule 1, Clauses 3 to 26, Schedule 2 and Clause 27 (so far as not previously concluded)  11.25 am  4th 28 to 59 and Clauses 61 to 68  —  5th 28 to 59 and Clauses 61 to 68 (so far as not previously concluded)  1 pm  6th 69 and 70, Clauses 73 to 102, Schedule 3, Clauses 103 to 114, Schedule 4 and Clauses 115 to 146  —  7th 69 and 70, Clauses 73 to 102, Schedule 3, Clauses 103 to 114, Schedule 4 and Clauses 115 to 146 (so far as not previously concluded)  —  8th 69 and 70, Clauses 73 to 102, Schedule 3, Clauses 103 to 114, Schedule 4 and Clauses 115 to 146 (so far as not previously concluded)  7 pm  9th 147 to 152, Clause 154, Schedule 5, Clauses 155 to 157, Clauses 159 to 169, Clauses 173 to 175, Schedule 6, Clauses 176 and 177, Schedule 7, Clauses 178 to 187, Schedule 8 and Clauses 188 to 192  —  10th 147 to 152, Clause 154, Schedule 5, Clauses 155 to 157, Clauses 159 to 169, Clauses 173 to 175, Schedule 6, Clauses 176 and 177, Schedule 7, Clauses 178 to 187, Schedule 8 and Clauses 188 to 192 (so far as not previously concluded)  5 pm  11th 193 and 194, Schedule 9, Clauses 195 to 214, Schedule 10, Clauses 215 to 237, Clause 153, Clauses 170 to 172 and Clause 238  —  12th 193 and 194, Schedule 9, Clauses 195 to 214, Schedule 10, Clauses 215 to 237, Clause 153, Clauses 170 to 172 and Clause 238 (so far as not previously concluded)  —  13th 193 and 194, Schedule 9, Clauses 195 to 214, Schedule 10, Clauses 215 to 237, Clause 153, Clauses 170 to 172 and Clause 238 (so far as not previously concluded)  11.25 am  14th 239 to 263, Clause 60, Clauses 71 and 72, Clauses 264 to 275  —  15th 239 to 263, Clause 60, Clauses 71 and 72, Clauses 264 to 275 (so far as not previously concluded)  —  16th 239 to 263, Clause 60, Clauses 71 and 72, Clauses 264 to 275 (so far as not previously concluded)  5 pm  17th 276 to 284, Schedule 11, Clauses 285 to 326, Schedule 12, Clauses 327 to 333, Schedule 13 and Clause 334  —  18th 276 to 284, Schedule 11, Clauses 285 to 326, Schedule 12, Clauses 327 to 333, Schedule 13 and Clause 334 (so far as not previously concluded)  —  19th 276 to 284, Schedule 11, Clauses 285 to 326, Schedule 12, Clauses 327 to 333, Schedule 13 and Clause 334 (so far as not previously concluded)  11.25 am  20th 335 to 337, Schedule 14, Clauses 338 to 346, Schedule 15, Clauses 347 to 354  —  21st 335 to 337, Schedule 14, Clauses 338 to 346, Schedule 15, Clauses 347 to 354 (so far as not previously concluded)  —  22nd 335 to 337, Schedule 14, Clauses 338 to 346, Schedule 15, Clauses 347 to 354 (so far as not previously concluded)  5 pm  23rd 355 to 375 and Schedule 16  —  24th 355 to 375 and Schedule 16 (so far as not previously concluded)  25th 376 to 386, Clause 158, Clauses 387 to 391, Schedules 17 to 19, Clauses 392 to 395, New Clauses, New Schedules and remaining proceedings on the Bill  —  26th 376 to 386, Clause 158, Clauses 387 to 391, Schedules 17 to 19, Clauses 392 to 395, New Clauses, New Schedules and remaining proceedings on the Bill (so far as not previously concluded) 
 Thank you, Mr. Gale. I welcome you and your co-Chairman, Mr. Atkinson, to the Committee. I am grateful for the opportunity to debate the Bill with Committee members. I hope that it will be useful, and I am sure that hon. Members will make constructive progress. However, if we do not, I know from previous experience that you can be firm to the point of ruthlessness in driving debates forward, Mr. Gale. I welcome that. 
 The proposed programme motion was discussed at the Programming Sub-Committee yesterday, and I am pleased to say that there was general agreement on it at that meeting. The end date of 6 February will allow us 26 sittings to consider the Bill and any new clauses or schedules that might be proposed by amendment. The Government will table several amendments but will aim to give the Committee good notice of them. We will provide a written explanation of the nature and effect of each amendment when it has been tabled. 
 The 26 sittings should provide more than enough time for proper scrutiny of the Bill. We will, of course, work hard to examine the Bill thoroughly and carefully. I hope that we will be focused and consensual in our work, and I am sure that we will be extremely constructive in our approach, and will therefore make your job easy, Mr. Gale. The programme motion proposes that the provisions of the Bill be considered in order, with a few exceptions for reasons of sense that have been agreed by the Programming Sub-Committee. I hope that Committee members will agree that the proposals constitute a sensible and reasonable way in which to proceed, and I ask them to support the resolution.

John Whittingdale: I join the Minister in welcoming you to the Chair, Mr. Gale. The imminent prospect of Christmas pales into insignificance compared with the anticipation that Conservative Members feel at the prospect spending the next seven to eight weeks considering the Bill under your chairmanship and that of Mr. Atkinson.
 It is a particular pleasure that you and Mr. Atkinson should be in the Chair, not because both of you are political colleagues of mine—I realise that that is entirely put to one side while you are occupying that Chair, Mr. Gale—but because the two of you are veterans of the last time that we debated some of the issues raised in the Bill, when we considered the Broadcasting Act 1996. Many might regret that you and Mr. Atkinson are in the Chair for this Committee, because you will not be able to express any views on the contents of the Bill. However, there are perhaps one or two organisations that are relieved that you, Mr. Gale, are not able to express observations on the contents of the Bill. However, in the case of the organisation that I am especially thinking of, it may be 
 that you and Mr. Atkinson effectively cancel each other out. 
 I am sure that every Committee member will agree that this is an enormous Bill in many respects. Its sheer physical size—running to two volumes, 395 clauses, and any number of schedules—is an indication that it has vast scope and covers an enormous part of our economy. Its consequences are likely to be profound and long term. It is six years since we last examined these issues and, even then, many of us felt that we would need to return to them. The pace of technological change is such that developments in these sectors happen quickly and there is a real danger that legislation becomes rapidly out of date. 
 For that reason, it is extremely important that we get the Bill right. We should try to ensure that it is sufficiently flexible to take account of change. I suspect that, back in 1996, none of us imagined what the broadcasting environment or the telecommunications sector would look like today. Most of the 1996 Bill was concerned with establishing digital terrestrial television, which has come and not quite gone. It has not gone, but it is certainly very different from the type of project for which we created the conditions in 1996. That demonstrates how hard it is to predict how the sector will develop, which is why we must try to ensure that the Bill will, at least, create a framework that is capable of taking account of unforeseen developments. 
 Clearly, the Bill has already been subject to a lot of scrutiny. It has been through several different stages. We had a communications White Paper that the Government published and to which organisations and individuals responded, and, in the last session we had the paving Bill to establish Ofcom—the Office of Communications. Some aspects of that Bill will be covered again in our consideration of this one. The House has already had a chance to debate the bringing together of the regulators into a single umbrella regulator and some of the issues that arise from that. 
 In the last Session, the Government published a draft Bill that was scrutinised by the Joint Committee on the Draft Communications Bill, which I am sure that we all welcome as a useful exercise that has saved us time. Undoubtedly, it cleared up one or two points and improved the Bill by making it more technically coherent. Although the Government did not accept the Joint Committee's recommendations in some key areas, in large part, the recommendations were accepted. Therefore, I am sure that all of us welcome the exercise and hope that the Government undertake similar ones for other Bills that could be improved with draft scrutiny. The other Bill for which the Minister is responsible is the Licensing Bill, which we look forward to receiving later this year. I suspect that that might also have been improved had it undergone the same pre-legislative scrutiny process. 
Dr. Howells indicated assent.

John Whittingdale: I am glad that the Minister agrees.
 There have also been several outside seminars with a variety of organisations—I spoke at one arranged by the Westminster Media Forum. The process has meant that the Bill's key issues have already received scrutiny 
 and debate. Some people have suggested that because of all that has taken place, there is less need for this Committee to consider the Bill and scrutinise each clause in detail. I profoundly disagree. I was slightly surprised that the Chairman of the Select Committee on Trade and Industry, the hon. Member for Ochil (Mr. O'Neill), made that observation on Second Reading. Although his Committee performs many valuable functions, I do not believe that it is a substitute for a Standing Committee scrutinising a parliamentary Bill. Therefore, he was wrong on that point. 
 Although the Joint Committee was very beneficial, it was subject to certain limitations. No votes were held and although the Government were able to respond to recommendations, they could simply accept or reject them. There was limited representation on the Committee. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) did a valiant job for the Conservative party, but we had no Front-Bench representation because of the Committee's nature. There was no opportunity for amendments to be tabled and there was no real debate. There was an opportunity to question witnesses, which was undoubtedly useful, but the exercise in that Committee was different from that in this Committee. Government Ministers were not required to justify their decisions or actions in the Joint Committee and requiring that is one of the principle roles that this Committee must undertake. It is perhaps realistic to accept that Opposition Members are unlikely to defeat the Government.

Brian White: The civil service Bill team played a key role during the pre-legislative scrutiny. The Joint Committee was able to question that team on specific points, which was one of that Committee's key benefits.

John Whittingdale: That is undoubtedly right. There is no doubt that that process has added a dimension to the scrutiny of legislation that is lacking in this forum. The two Committees are complementary and one is no substitute for the other.
 Trying to defeat the Government in Committee is not one of the Opposition's key purposes, although we shall press amendments if we think that the Government are wrong. As I have said before, we think that the main thrust of the Bill is correct. However, there are many detailed issues on which organisations that are likely to be affected by the Bill are seeking clarification and more justification of the Government's position from the Minister. It is part of the Opposition's purpose to give such organisations the opportunity to raise issues through us in order to get the Government to respond to their genuine concerns. The many amendments tabled by myself and other Conservative Members are an attempt to achieve that. We want organisations outside the House to receive a response to their concerns from the Minister. 
 There is a reason for that because it always comes as a shock to me that the records of our Committee proceedings are read carefully by lawyers and by those 
 who are charged with implementing the legislation that we pass. I sometimes suspect that they might be a little appalled by one or two of the diversions that occasionally happen in Committee, although that will certainly not happen in this Committee under your watchful eye, Mr. Gale. The fact that what Ministers, in particular, say in Committee is read and sometimes taken into account is a part of the legislative process. That is a further important reason why we must draw out the Government on several of the Bill's provisions. 
 We have limited time in which to do that. The Minister said that there would be 26 sittings, which takes us to 6 February. He said that he was confident that that would be ample time in which to cover the ground. I do not wholly share his confidence. I draw the Committee's attention to a comparison with previous Committees that have considered similar legislation. Such a Committee considered the Broadcasting Bill in 1990, which consisted of 4 clauses and 22 schedules. It was therefore just over half the size of the Bill that we are presently considering. However, the 1990 Bill was discussed in 38 sittings in Committee and the debate continued for 101 hours and six minutes.

Kim Howells: It sounds like hell.

John Whittingdale: Sadly, I was not able to participate in it but I know that a number of hon. Members in this room are veterans of that Bill. They will perhaps tell us later whether it was hell or not. I hope that the Minister will acknowledge that the 1990 Bill received a great deal of scrutiny, as is evidenced by the number of sittings and the amount of time that was spent on it.
 The Broadcasting Bill 1996, which I was involved in, had only 150 clauses and 11 schedules. It was therefore about one third of the size of this Bill. However, for that Bill there were 17 sittings, taking 52 hours and 20 minutes. 
 It is not really proper to use the Broadcasting Bill 1996 and the Broadcasting Bill 1990 as comparisons, because those Bills focused only on the broadcasting sector. The Communications Bill does not focus only on broadcasting—although, from some past debates, hon. Members might think that it did. We are keen that this Committee should consider in detail the provisions on the telecommunications sector. In some ways, they will be even more important for the future development of our economy than the provisions on broadcasting. It is essential that we get them right. The scope of this Bill is far wider than that of the two earlier Bills and yet it is proposed that only 26 sittings be allowed to debate 395 clauses. 
 My hon. Friend the Member for Fareham (Mr. Hoban) has examined this matter in some detail. If we were to give this Bill the same consideration, based on the number of its clauses, as was given to the Broadcasting Bill 1990, we would have not 26 sittings but 76 sittings. Some of us would welcome the opportunity to spend more time on this Bill.

Kim Howells: Does the hon. Gentleman agree that, if he goes on giving us history lessons, we will certainly need more than 26 sittings?

John Whittingdale: This is an important point. If this Committee is to do its job properly, we will need to scrutinise in detail each of those 395 clauses. The amount of time that has been allowed for that is limited; it is certainly considerably less than was available to our predecessor Committees, which were considering similar legislation.
 There are one or two other problems to do with the period during which the Committee will sit. It will be helpful, Mr. Gale, to have your guidance. Although the Committee will sit during a period of around two months, Christmas is in the middle of that period. I am perfectly happy to spend a large part of my Christmas break reading the Communications Bill and considering amendments to it—although that may not go down well with family. However, I seek clarification from you, Mr. Gale, on a practical point. This Committee will be sitting on the day on which the House rises for the Christmas break, and will be sitting again on the day on which the House returns. Therefore, in order to table amendments for the day on which we return in January, we will have to table them before the House rises before Christmas. Even though there is a long period between those two sittings of the Committee, it will be necessary to table amendments before that period because the House is not sitting.

Roger Gale: I may be able to assist the hon. Gentleman and the Committee. It is clear that there are difficulties but, happily, the hon. Gentleman and other Committee members can table amendments on the last two days of the recess, and the selection will be made shortly before the first sitting of the new year. Therefore, Committee members will be able to prepare their amendments during the Christmas break.

John Whittingdale: That is hugely helpful, and Conservative Committee members are very grateful. The Christmas break will be even more enjoyable than usual, as we will be able to consider the amendments that we will wish to debate immediately upon our return.
 That relieves a little bit of the pressure that is on us in the period before we rise. However, that pressure is still considerable. It has been caused in part by the new hours. We now start at 9 o'clock on Thursdays, and after Christmas we will also start at that time on Tuesdays. That means that we have a very limited time to prepare for debates. It is a fact of life that Committee members are always racing to keep up, but the new hours will not help. 
 It has come as a bit of surprise to several of the groups outside this place who have an interest in the Bill to discover how quickly it has moved into Committee, and how little time has been available to table amendments. That is already reflected in the Amendment Paper, as one or two amendments will have to be starred. The time might come when we will appeal to you, Mr. Gale, to accept starred amendments—for instance, if a matter arises late in the day that it is important for the Committee to 
 consider. All of this is uncharted water, because of the new hours. We will have to see how things develop. 
 I am also grateful to you, Mr. Gale, for the indication that you gave that it might be possible to reconvene the Programming Sub-Committee if we are unable to give proper consideration to important areas of the Bill before the knives fall in the places where they are currently intended to fall. We will need to watch that. 
 There are two specific issues that I wish to raise about the consideration of the Bill and the timing of our debates. The Bill has evolved from a huge number of different consultations, publications, reviews and reports. Most of them have now been taken into account, and their recommendations have finally surfaced in the Bill, but the Independent Television Commission's review of the programme supply market has only just come out. It deals with an important issue: how we should encourage and help independent producers to create a viable, thriving, independent production industry. 
 Most people feel that the ITC review has done a valuable job and come up with some helpful recommendations. My discussions with people in the industry have revealed that there is already recognition that the ITC's recommendations will be valuable. I hope that the Government intend to table amendments to implement some of them, but if that is going to be the case we should be given ample notice, so that we can examine them and talk to the industries that will be affected by them. If we were to be given only two days or so to consider those amendments and the provisions in the Bill, that would be insufficient. Therefore, I hope that the officials in the Department for Culture, Media and Sport will also be working over the Christmas break—and before it—to get those amendments done. 
 I hope that information on another area of the Bill will also be made available to the Committee before we reach it. It relates to the radio spectrum, and it is the part of the Bill that makes my head spin the most. It is a hugely complicated and technical area. I have no doubt that hon. Members will require several wet towels to be wrapped around their heads before we come to debate it. We will be helped in our consideration of those provisions by the report of the Select Committee on Trade and Industry, which is currently taking evidence on the issue. I hope that the Trade and Industry Committee will try to complete its deliberations in time for us to have its report before we reach that section of the Bill, although I fully accept that that is not entirely within the Government's control.

Andrew Lansley: I am grateful to my hon. Friend for making that point. The Trade and Industry Committee intends to achieve that—I speak as a member of it—but it has a number of other items on its plate at present. There can be no guarantee that that Committee will be able to agree on a report before the recess. A report would need to be published by then if there is to be any possibility of tabling amendments in this Committee that reflect the Select Committee's conclusions. The relevant clauses will be considered on 9 January, according to the
 sittings motion. My hon. Friend has put his finger on a relevant point and there is no reason why the whole spectrum section could not be taken as a discrete part of the Bill because, in a sense, it flows from other parts and could be considered later.

John Whittingdale: That is an alternative way to address the problem. I am disappointed to hear my hon. Friend say that there is no strong chance of the report coming out before the recess. It seems unfortunate that the Trade and Industry Committee will produce recommendations on a part of the Bill that will already been considered, and approved or rejected, by this Committee.
 There will, perhaps, be an opportunity to return to some of the relevant issues on Report and that will certainly be possible when the Bill is considered in the House of Lords. Nevertheless, it would be helpful, since we will debate the issues, to have the Trade and Industry Committee's views beforehand. Perhaps the Minister and the Committee could consider that matter before we finally approve the programme motion.

Andrew Robathan: I understand that the good civil servants, the so-called Bill team, who are doing an excellent job, believe that they have just about got it right and that they have the perfect Bill. Does my hon. Friend consider the Bill to be perfect? Does he consider it likely that the Government might introduce amendments that could take up much of the Committee's time later on?

John Whittingdale: I am sure that it is a matter of pride for the Bill team to try to minimise the number of necessary amendments. The Minister has already indicated that the Government might wish to introduce amendments and he helpfully told us that he would produce explanatory notes to ensure that we fully comprehend what they wanted to amend. The hon. Gentleman has, to some extent, already solved that problem. We anticipate that there are bound to be amendments and it is absolutely essential that some be made in the area of the ITC review if the relevant recommendations are to be put into effect.
 I do not want to spend much longer on the matter. The programme motion raises serious issues. You will point out, Mr. Gale, that the programme motion was originally approved by the House of Commons on Second Reading. There was, however, no opportunity to debate it at that time, so this is the first opportunity for us to put some of our concerns on the record. The Opposition voted against the programme motion and it is important that we set out our reasons for doing that. On a similar point, the programming Sub-Committee met yesterday in private, so there has been no opportunity to raise our concerns about that and put them on the record. 
 The Bill is hugely important. The Committee will find it hard to give the Bill the proper scrutiny that it requires. We will do our best, but previous experience of programme motions has demonstrated that Bills often pass through the Committee stage with large sections that have never been debated. That makes for 
 bad law. Because the Bill is so far reaching and because its effects will be so great, it is all the more important that it should receive proper scrutiny. The Opposition will attempt to give it that within the confines of the programme and sittings motions. I hope that if we are not able to give the Bill that degree of scrutiny in certain areas, that that will be taken into account when it goes to the House of Lords and that the other place will carry on that exercise.

John Greenway: I do not intend to repeat all that my hon. Friend said about the programme motion, but I wish to welcome you to the Chair, Mr. Gale. My hon. Friend referred to the Standing Committee that considered the Broadcasting Bill 1990—a happy experience that you and I shared. Prior to that, we worked together on the Home Affairs Committee on a valuable report in the run-up to that legislation, which was extremely helpful. It has certainly served us in good stead as we have considered these issues over the years.
 For the avoidance of doubt, I remind the Committee that, for most of the 1990s, I was a consultant to various ITV companies, a position that I relinquished on 1 February 2000 when I was appointed Opposition spokesman on DCMS matters. I doubt that that experience will mean that any speeches I make, if I am fortunate enough to catch your eye, Mr. Gale, during our proceedings will be slanted, but I have been provided with a huge wealth of experience of what has been happening in the broadcasting world. I believe that it is important to place that on the record.

Roger Gale: Order. The hon. Gentleman will have to let us have the benefit of his experience later, because the motion under discussion is time limited.
 It being half an hour after the commencement of proceedings on the motion, The Chairman, put the Question, pursuant to paragraph (9) of Sessional Order C relating to Programming Sub-Committees [29th October 2002]. 
 Question put and agreed to.

Roger Gale: I remind the Committee that there is a money resolution and a ways and means resolution in connection with the Bill, copies of which are available on the Table. In light of the remarks made by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) who is leading for the Opposition, I remind members of the Committee that adequate notice should be given of amendments. As a general rule, Mr. Atkinson and I do not intend to call starred amendments, including any that may be reached during an afternoon sitting of the Committee.
 A further piece of housekeeping advice concerns the conduct of the Committee during our debates. It has been my custom and practice to permit a reasonable debate at the start of our discussions on a clause or group of amendments, or a stand-part debate, but not both. In complex Bills, we have recognised that sometimes it is to the advantage of the Committee and for its convenience to have a fairly lengthy debate at the beginning of a clause. Members of the 
 Committee can have one stand-part debate, not two, and it is up to them to determine which they require. That being said, clause 1 has no amendments tabled to it and will be subject to a stand-part debate.

Clause 1 - Functions and general powers of OFCOM

Question proposed, That the clause stand part of the Bill.

John Whittingdale: I had not anticipated leaping to my feet quite so soon but, unfortunately, we have already seen a demonstration of the effects of knives in our being unable to complete our debate on the sittings motion.
 Given that clause 1 sets the scene for the establishment of Ofcom, it would be useful to make a few general observations about the regulation of utilities and public limited companies and, in particular, the challenges facing Ofcom as a newly established regulator covering a considerable variety of industries. As members of the Committee will be aware, Ofcom will take on the functions of five regulators that currently perform different functions. There is some overlap between the Independent Television Commission and the Broadcasting Standards Commission and one or two other areas that are currently divided up among the five regulators, but in the main the embrace of Ofcom will take in all the activities covered by those regulators and, in some cases, extend a little further. Ofcom will also take on responsibility for some of the work of the Office of Fair Trading. 
 It is instructive to consider that Oftel was the first of the five regulators to be set up, as a result of the Conservative Government's privatisation of British Telecom. Oftel was to some extent a trailblazer among the utility regulators. Some might think that it has been less successful than other regulators. Certainly, if one considers the state of the market that Oftel regulates, its prime objective of encouraging and promote competitive markets—

Andrew Lansley: Will my hon. Friend give way?

John Whittingdale: Yes.

Andrew Lansley: My hon. Friend was involved in these matters at an early stage, so he will recall that Oftel did not have a prime duty to promote competition. It had a range of duties, one of which was the promotion of competition. I make that point because it will be salient later.

John Whittingdale: My hon. Friend is entirely right, and I stand corrected. That is an important distinction, which we will examine when we consider the first group of amendments. One reason why Oftel has been slightly less successful in achieving competition might be that that objective was not given sufficient priority. My hon. Friend the Member for Ryedale (Mr. Greenway) and I were involved in such matters in a previous life, and we might be able to draw on our experiences when we come to debate the subject.
 Oftel has to some extent been overtaken in achieving competitive markets by one or two of the 
 regulators that have been set up since. I should like to focus on that.

Michael Fabricant: Does my hon. Friend give Oftel at least some credit for announcing this morning that a competitive system of directory inquiry telephone lines will be introduced? My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) points out that there was no prime directive to introduce competition, but Oftel has introduced it to some degree, although perhaps not as much as the Independent Television Commission or the Radio Authority.

Roger Gale: Order. May I suggest before we stray that we do not do so?

John Whittingdale: My hon. Friend the Member for Lichfield (Michael Fabricant) makes an important point, because it is clearly a prime function of Ofcom, as the successor to Oftel, to carry on its work in promoting competitive markets. His example demonstrates that some progress has been made, but it is some 10 years since Oftel came into existence.

Andrew Lansley: I shall try to restrain myself, Mr. Gale, but should like to complete my point. My recollection is that Oftel said on about 1 July that, notwithstanding the fact that the Telecommunications Act 1984 imposed a range of duties, it would treat the promotion of competition in telecommunications markets as its principal objective. That is one reason why the transition from Oftel to Ofcom will be smoother.

John Whittingdale: I do not want to anticipate our debates on amendments that stand in my hon. Friend's name, because they will address the crux of that matter and whether we should put the promotion of competition into the Bill, but I agree entirely that that is perhaps the most important duty of a regulator.
 Ofcom is a huge body. Its scope is so vast and its powers so great that it is extremely important that proper checks and balances are built into the Bill to ensure that there are safeguards and rights of appeal, that the regulatory principles are given proper prominence, that Ofcom will work to strictly defined criteria, and that it is properly accountable. The industry was once in public ownership and was therefore subject to regulation from Ministers, who had the power to issue directions, set prices and instruct management. Although we have left that behind through privatisation, there is a danger that we have merely substituted ministerial regulation with regulation by an independent body, which is a system of less accountability than the original system under which Ministers operated. That has not necessarily happened, but it is a danger that should be borne in mind. We must build in measures to ensure proper accountability. 
 It is legitimate to ask the question now, because it is difficult to foresee another stage at which it could be asked. Do we need to strengthen the powers of Parliament to scrutinise decisions made by Ofcom? That issue has been raised in many of the debates so far—on the paving Bill and in the White Paper and the Joint Committee. Should a stand-alone Select Committee of the House have the role of monitoring 
 Ofcom and act as a body to adjudicate on or consider complaints against Ofcom? We must be sure that there is proper accountability of Ofcom, because it will be an enormously powerful body. 
 When regulators have been set up in the past, a separate consumer body has often been established—bodies such as Energywatch, which was set up to represent the interests of energy consumers and which works alongside the regulator, Ofgem. Similarly, Postwatch was set up to consider the interests of postal users and works alongside Postcomm. No equivalent body is being suggested under this Bill. We will consider the role of the consumer panel, but that is a different entity built into the process of Ofcom. No separate organisation is charged with fulfilling the same sort of tasks as Energywatch and Postwatch. We should bear that in mind. 
 The principal duty of a regulator is to work towards its own destruction. If a regulator is truly successful it will create conditions in which there is no longer any need for regulation. However, that will never be fully possible in the telecommunications sector, because it is highly unlikely that we will ever achieve competing infrastructure networks. I am not even sure that that would be desirable, because it would be a hugely expensive, and not wholly necessary, operation. It is possible to achieve great competition using only one network if the regulatory principles are properly in place. There will, however, be a need for regulation of telecommunications as long as we have a single infrastructure under single ownership. 
 That is not to say that the regulator should not work towards withdrawing from other parts of the market. Although it is not an exact parallel, it is worth considering the example of Ofgem, which has been successful in creating a competitive market in electricity supply and has now withdrawn almost entirely from trying to regulate prices in the area of supply. Although it continues to regulate prices in the monopoly area—infrastructure—there is now a competitive market for supply, with several companies offering supply contracts. That in itself has created problems, but I will not spend time on those today. 
 The example is instructive because the problems were not caused by the actions of the regulator. The regulator has been highly successful in carrying out precisely what was required in the original legislation. It was told to work towards creating a competitive market and to bring down prices for the consumer, and there is no doubt that electricity prices have come down. Ofgem was not told to give equal priority to maintaining diversity of supply, and, as a result, we now have one or two problems in the nuclear sector and the renewables sector. My hon. Friend the Member for Blaby (Mr. Robathan) is a renowned expert in combined heat and power, in which I take a close interest. CHP is suffering greatly. It is important to set out precisely what a regulator is expected to do.

Eric Joyce: That is in clause 3.

John Whittingdale: The hon. Gentleman is right, and we want to spend a lot of time going through each of the objectives in clause 3 to ensure that they set the proper priorities and that all considerations are properly covered. From our experience of utilities that are now subject to great regulation, we know how essential it is to get the legislation governing their operation right if we are to avoid subsequent problems, such as those that we are now seeing in the energy sector.
 The next thing that it is essential to get right is the people who will carry out the task—in other words, the people who are appointed to Ofcom. The board is already in place. The individuals on that board each bring their own strengths and experience, which will no doubt be valuable. I accept that the board should be kept small, although I am sure that in the not-too-distant future we will spend some time considering representation from different parts of the kingdom and considering whether certain sectors should have stronger representation than others. I am not sure that every sector and every part of the kingdom can be covered, but we will come on to that argument. 
 It is important that we get the personnel right. Undoubtedly the most important appointment is that of the chairman of Ofcom—Professor David Currie. When he was first appointed, it was suggested that he was another Labour crony. It was a matter of some criticism that, once again, someone with well-established links to the Labour party was being appointed to a key position. Professor Currie has a distinguished record and immense knowledge and experience in this area. I will come on to one or two of his observations on how he sees his task as chairman of Ofcom.

Chris Bryant: Will the hon. Gentleman clarify where in clause 1 the chairman of Ofcom is mentioned?

Roger Gale: Order. I have listened to the hon. Gentleman's efforts to intervene from a sedentary position too often already. It is the Chairman who will decide what is in order and what is not. I have made it abundantly plain and I will do so once more, but only once more. During the opening stages of discussion of a Bill, I am prepared to allow reasonable rein, providing that that facilitates discussion.
 I also say to the hon. Member for Maldon and East Chelmsford that Professor Currie is Professor Lord Currie. We should give people their proper titles.

John Whittingdale: Mr. Gale, you are of course entirely right and I stand duly corrected. I would say to the hon. Member for Rhondda (Mr. Bryant) that it is extraordinary to suggest that, in debating the functions and general powers of Ofcom, as covered by clause 1, we should not consider the experience of the chairman who will carry out those functions. It will be crucial to the future operation of Ofcom that the chairman should be someone with the right experience and qualifications to undertake the task.
 I certainly think that Professor Lord Currie has qualifications that make him an admirable candidate. 
 However, I merely say now, as I did when his appointment was first announced, that because there has been much comment about his political activities—although I am sure that they are entirely separate—he will have to work hard to avoid any suspicion that his decisions have been in any way politically influenced. I am sure that they will not be, but there is a danger. Various appointments, such as the head of the Audit Commission, the chairman of the BBC, the director-general of the BBC, and now the chairman of Ofcom, have been of people with close ties to the Labour Government. That inevitably gives rise to suspicions that politics was involved in the appointments. I am sure that Professor Lord Currie is aware of that and that he will bear it in mind when he carries out his duties. 
 I draw the Committee's attention to a paper that Professor Lord Currie wrote, although I do not think that he was Professor Lord Currie when he wrote it—I am not sure when he was elevated to the peerage. The paper was written in May 2002 and is entitled ''Regulatory Creep and Regulatory Withdrawal: Why Regulatory Withdrawal is Feasible and Necessary''. I strongly recommend the paper to all members of the Committee because it makes salient points about the purpose of regulation, how regulators should function and, especially, the duties and functions of Ofcom. I imagine that the paper was written before Professor Lord Currie had any inkling that he might suddenly begin the task of carrying out those duties and functions. That makes it all the more interesting to read how he, as an academic, saw the job. 
 Professor Lord Currie is clear that competition should be the main priority for Ofcom or any regulator. He states: 
''Where competition is reasonably robust or where it can develop to be so, it is usually better for sector regulation to withdraw and reliance placed on competition policy.''
 He then flags up the danger of regulation, pointing out that price-cap regulation can discourage investment and innovation and that regulators 
''may be tempted to rely on licence conditions as an easier way to regulate''.
 However, he says that the prime duty of a regulator should be to try to encourage competition because that is of greater long-term benefit for the consumer than reliance on statutory intervention and regulation. I think that that principle is absolutely right. 
 Professor Lord Currie goes on to draw attention to a very real danger that the Bill takes account of, to an extent: regulatory creep. That has already happened in respect of several existing utility regulators. That may happen if part of market is regulated because a monopoly exists or there is a dominant player, and it is felt that all new entrants to that part of the market should be regulated similarly. Additionally, it might happen because the regulator has a tendency to extend the scope of regulation beyond the narrowly defined area in which there is clearly a public interest because a monopoly is positioned in two areas, even though there is competition and there is no public-interest need.

Brian White: Is not one of the issues that individual regulators have been prone to make their own interpretations? Ofcom has a board comprising several people, so the problems about which the hon. Gentleman is concerned should be avoided. The fact that Ofcom has been set up with a board addresses several of the issues that he mentioned.

John Whittingdale: I hope that that is correct. Ofcom brings together a board, which represents a slightly different model from existing regulators, but I am not convinced that that alone will be sufficient. It is almost classic public choice theory. We understand from the newspapers that Ofcom will employ not 1,100 people, which is the total number employed by the existing bodies, but 900 people, which is still a lot of people. Ofcom has a big task so I do not necessarily suggest that it should not employ those people, but 900 people will want to extend the scope of their employment and to justify their existence. Classic public choice theory highlights the likelihood that they will seek to extend into other areas. That would be dangerous and we must guard against it. Regulation has already extended into areas where it can be shown that doing so may damage, not assist, the promotion of the public interest.
 It is worth considering the issue that justifies regulation. Let us consider Professor Lord Currie's own view of why it is necessary to have a regulator and the limitations that need to be placed on that regulator. A short passage from his paper, which is relevant to Ofcom and its functions, states: 
''Many see the justification for government intervention or regulation as market failure. But it is not. There are two criteria: the presence of a market failure and the absence of government failure. Since government intervention is often ill-targeted and ineffective, the second of these criteria rules out a great deal of would-be intervention. Intervention is justified only when the market failure is considerable, so that blunt government intervention can be helpful; or if the intervention is very well targeted. Well-targeted intervention is especially difficult in fast moving, innovative sectors such as telecoms.
Failure to recognise this point can readily lead to regulatory creep.''
 That is an important warning and I am delighted that the person who delivered it is the person who is now in charge of the regulator. I hope that he will genuinely continue to bear it in mind, because it recognises the limitations of regulation and a warning of what can go wrong if regulators attempt to intervene. Professor Lord Currie pointed out that each individual intervention in the market may address a specific problem, but taken together they can have a cumulative effect. He says that 
''overlaying too many interventions stifles the operation of the market and generates unforeseen interaction effects between the various interventions. The result can well be incoherence and stagnation.''
 Even though Ofcom will have a powerful role, I hope that such prescient warnings are borne in mind. 
 I draw attention to two specific areas that Ofcom will have to address and about which Professor Lord Currie has expressed views. It is important that the Minister says whether those views played a part in the decision to appoint Professor Lord Currie as chairman of Ofcom. The two matters are relevant and topical, 
 and the first relates to the structure of industries that the regulator will oversee. Professor Lord Currie said: 
''The withdrawal of regulation is only possible with the right industrial structure. The withdrawal from price cap regulation that we have observed in gas and electricity in the UK''—
 a point to which I have already referred— 
''was feasible only because of the separation of distribution from supply.''
 At the time, Professor Lord Currie did not realise that he was to become the regulator and goes on to say specifically: 
''It is for that reason that we believe that the fastest and best route to regulatory withdrawal in telecoms is for BT to separate its distribution business from its business of supplying services. That would make it much harder for Oftel to defend its current regime of regulatory intervention, which is in danger of spilling over into regulatory micro-management.''
 Professor Lord Currie goes on throughout his paper to make the case that the best and most effective way in which to promote competition in the area where it is possible to achieve competition, while regulating the monopoly area of activity, is through separation. I am not advocating separation, but the fact that the person who has been chosen by the Government to chair Ofcom is himself on record as advocating a separation is something that people with an interest in such matters will note. The Government may wish to say whether the decision to appoint Lord Currie as the chairman was influenced in any way by his statement on the record that he believed that the most effective way to achieve competition in telecoms was to separate BT's ownership of the infrastructure from the services that it provides.

Chris Bryant: Does the hon. Gentleman therefore think that there would be any read across into the vertically integrated market in digital satellite television?

John Whittingdale: No. That is an entirely different area, but I am happy to debate it, and I am certain that we will do so at length.

Roger Gale: Order. Yes, but not now.

John Whittingdale: I take your warning on board, Mr. Gale. The hon. Gentleman's question is interesting, and he was right to raise it: it will feature in our discussions of several clauses.
 So far, I have deliberately focused my comments on the role of Ofcom as a telecoms regulator because that is what the beginning of the Bill deals with and, as I have said, not enough attention has been paid to that part of Ofcom's role—especially in comparison with the enormous amount that has been spoken and written about Ofcom's work in terms of regulating or setting the rules that govern the ownership and content of television and radio broadcasting. I keenly look forward to debating that during our consideration of the Bill. 
 Lord Currie's paper addresses another interesting matter that also gives an indication of his thinking—and I would be interested to know whether his views are shared by the Minister and the Government. 
 Mobile telephony is one part of the telecommunications market that already has a functioning competitive market, and therefore Ofcom has much less justification to intervene in that area of it than it does in others. Lord Currie stated: 
''In our judgement, the mobile communications sector corresponds to the case described above. It is subject to rapid technological change and competition is effective. In these circumstances, regulation needs to be light-handed to avoid slowing innovation and investment and the dispersion of new technologies. Regulation to cap prices to avoid excessive profits, of the kind familiar in the slower moving fixed-line sector, may well be highly counterproductive and work to the severe detriment of customers and to the overall competitiveness of the UK economy.''
 That is a very topical issue. The mobile telephony sector is currently complaining to the OFT about Oftel's intervention in its market; it is arguing that it is a properly functioning, competitive market. 
 Professor Currie's paper does not suggest that there should be no regulation, but he makes the point that mobile telephony has already achieved a state where there are four players in the market that each have a roughly equal share of it: of course, there is a market leader and a market trailer but each of them has a sizeable chunk of the market, and there is about to be a fifth entrant into it when and if 3G is launched. There is also considerable churn between customers; they transfer between mobile suppliers. 
 Theoretically, those characteristics are among the tests for whether a competitive market exists. Therefore, we can say that there is already much more competition in mobile telephony than there is in fixed line provision. For that reason alone, as Lord Currie has suggested—and as I proposed on Second Reading—Ofcom should focus its attention more on trying to encourage competition in the fixed line sector, where we have not made as much progress as we should have, than on spending a lot of time examining mobile telephony. It faces huge challenges in other regards that are all to do with the enormous sums of money that it has had to commit to 3G and the fact that it will have to commit more to establish its infrastructure. 
 The mobile telephony market is already under severe pressure and there is a considerable amount of competition in it and yet, to date, Oftel has felt it necessary to micromanage, to scrutinise individual tariffs and to intervene. It seems to me that its attention would have been better focused on areas in which a great deal more progress would be necessary to achieve a competitive market. The reason why I raise those arguments is, first, because they are strong and, secondly, because they were made by the chairman of Ofcom. It is incumbent on the Government who decided to appoint Professor Lord Currie as the chairman of Ofcom to show whether they agree with some of the views that he set out in his excellent paper. 
 I felt that this was an opportunity to raise big, general questions before we consider the amendments, which will focus on narrower aspects of the Bill.

Simon Thomas: I welcome you to the Chair, Mr. Gale. I served under you in Committee on the Office of Communications Bill. You got us
 through that much shorter Bill in good time, and I look forward to getting through this longer Bill in good time, too.
 I welcome the fact that the Bill gives a commitment to establish Ofcom offices in Wales, Scotland, England and Northern Ireland. That is an important matter, and one that I raised with the Minister when we were considering the Office of Communications Bill. He gave a commitment that such offices would be established, and I am pleased that the provision is in the Bill. However, an office is one thing, but whether it is properly staffed, its resources, and how it works in its territories is another. I suppose that, so far as those matters go, we will wait and see. I want to explore such issues to find out to what extent Ofcom will relate to Wales, Scotland and Northern Ireland, and to not just broadcasting but other important measures, such as access to broadbrand and the regulation of the radio spectrum. Those are vital issues for the economy, particularly that of Wales and other rural areas. Having Ofcom representation and an Ofcom office will be important in such areas. 
 So far, the Bill does not require an office in, say, Cardiff to contact the National Assembly, which may be 500 yd down the road. There would be no relationship between that office and the National Assembly for Wales. Likewise, there would be no relationship between offices in Scotland and Northern Ireland and their devolved Administrations. Ofcom will have to consider that carefully. I hope that we can amend to Bill to give Ofcom a duty in that respect, but if we cannot, I hope that the Minister will say something about how he expects Ofcom will relate to the devolved Administrations through the offices established in those countries.

Chris Bryant: The hon. Gentleman might be interested to know that Lord Currie said last night that he had been in Cardiff only two days previously in order to do precisely what the hon. Gentleman suggests.

Simon Thomas: That is an encouraging start, and it brings me neatly to my next point, which is to ask whether Ofcom, as well as having offices in the nations of the United Kingdom, will also hold meetings in those nations. I should not like Ofcom to become a London-bound body. An important ITC report on regionalisation had the working title ''Beyond the M25.'' It is important that Ofcom takes its work out of London to not only Cardiff, but Bangor and Caernarfon, which are important centres of broadcasting in Wales, and into Scotland and Northern Ireland, too. People would then know what Ofcom was doing on their behalf.
 The hon. Member for Maldon and East Chelmsford has already mentioned how powerful Ofcom will be. Ofcom will affect not only what people see and hear on the television and radio but what they do daily, whether they can get the mobile phone service or broadband service that they want, and whether their business can get on to the web fast enough to establish itself in a rural area, for example. Ofcom would be a poor body if it located itself in the metropolis and did not consider how it rolled out and maintained its activities in different regions. It is good that the Bill 
 says that Ofcom is establishing offices, but it remains to be seen how the offices will relate to the people in those nations. I look forward to hearing the Minister's views on that. 
 My second and final point is on what sort of functions and powers Ofcom is taking on. We know from clauses 1 and 2 and the schedule that Ofcom is taking on the regulatory functions of five current regulators, some of which have clear representational roles. For example, the Radio Authority and the ITC both have territorial representational roles. Regarding Ofcom's functions, I am concerned that there is no mention, either in the clause or anywhere else in the Bill, of two vital issues. The first is access to broadband and the second is the digital signal and switching off the analogue signal. If the five current regulators, whose functions Ofcom is taking on, have a regulatory function, but no obligation to achieve their aims, Ofcom is in danger of continuing the current situation.

Andrew Robathan: Given that the point about digital switch-off was made by a Liberal Member for the north of Scotland, does the hon. Gentleman not think that it is a pity that no Liberal has cared to attend the Committee?

Roger Gale: Order. I nearly put this on the record earlier on and I now feel obliged to do so. The hon. Member for North Devon (Nick Harvey) was present earlier and sent a note to the Chairman indicating courteously that he had other business that detained him this morning.

Simon Thomas: That certainly answered the intervention, Mr. Gale. I am, of course, aware that there is another Liberal Member on the Committee.
 I am concerned about two issues. First, how can we be sure that the Government's commitment that the analogue signal will not be turned off until 95 per cent. of the population have access to a proper digital signal will be transferred as a function and duty of Ofcom? If the Government want that to happen, it must be achieved by Ofcom. Secondly, how will Ofcom deliver the Government's general promise that there should be equality and parity of access to broadband throughout the country? I am concerned that that is not written into the Bill as one of the powers and obligations of Ofcom. That allows Ofcom open to interpret the Bill very literally. 
 The hon. Member for Maldon and East Chelmsford mentioned how Ofgem has, perhaps, wandered away from what the House thought that it was passing in the Utilities Act 2000. He was right to do that. We were only able to bring Ofgem back on track when the Government saw fit to bring forward the social and environmental guidance for that body, which provides a much wider context for that regulator. I do not think that we will have the time or the energy to return to the Bill in future, so it is, therefore, important that we consider some of the facets that are missing from the duties and powers of Ofcom. 
 How are we to control the digital-analogue switch-off, or switch on—how an hon. Member might regard that matter would depends on whether he was a pessimist or an optimist—and how we are to control 
 the parity of access to broadband services in all areas of the United Kingdom? Those aspects are currently missing from the functions of Ofcom. 
 That is all I want to say about the clause. I hope that the Minister will reply to some of my points.

John Greenway: My hon. Friend the Member for Maldon and East Chelmsford has raised the fact that Ofcom will be extremely powerful. However, in clause 1 stand part debate we need to be clear how the various mechanisms relating to Ofcom's powers work.
 As I understand it, and as the hon. Member for Ceredigion (Mr. Thomas) has pointed out, clauses 1 and 2 and schedule 1 restrict Ofcom's responsibility to those functions that are currently carried out by the five existing regulators. Although clause 1(3) appears to give Ofcom the power to do almost anything it likes in respect of those functions, which makes it powerful, it is still restricted in terms of pursuing its functions. Other powers will be granted to Ofcom as we proceed through the Bill. It would be helpful if the Minister could endeavour to explain to what extent he believes that Ofcom will have the flexibility that it needs in regulating and developing a future market in telecommunications and the media. In the original sittings motion debate, I was about to refer back to the experience that you, Mr. Gale, and I had in 1990. The ink had barely dried on the Bill and Royal Assent had been granted, but some of its provisions were already out of date. 
 The issue is important for the industry. I rather hope that, by the time our proceedings have finished and the Bill has been to another place—presumably in the summer—we will all be satisfied that we have a Bill that creates a new regulator, notwithstanding its huge powers, to which my hon. Friend the Member for Maldon and East Chelmsford referred. The regulator must have the flexibility within the framework that we have set to adapt to the changes that will undoubtedly take place in the marketplace. 
 If we are lucky enough to catch your eye, Mr. Gale, we will concentrate on teasing out precisely what Ofcom's duties will be, especially whether it will have, for example, powers to further the cause of deregulation, which, judging by what my hon. Friend said, is something in which the chairman, Lord Currie, deeply believes. We also want to examine the extent to which Ofcom can encourage self-regulation in areas where that is not the order of the day. It is vital that the Minister deals with the issue in the stand part debate and we are clear about the precise powers that Ofcom will have in relation to particular functions, and how limited those functions may be. 
 For the first time, another regulator will have powers over the BBC. I understand that there is to be a revised version of the BBC agreement. When will that be published? Some promise has been made that it would be done by the time we reached the relevant clauses, and some indication of when it would appear was discussed by the Joint Committee. I am sure that this Committee would find it helpful to know. 
Several hon. Members rose—

Roger Gale: Order. I was about to say that, because the hon. Member for Ryedale has raised the issue, I would permit the Minister to respond if he wished to do so. Otherwise, the matters he mentioned refer to clause 193, so there is time for the Minister to gather his thoughts.

Michael Fabricant: It is a pleasure to serve under your chairmanship, Mr. Gale. I note that the Bill refers to previous Acts, some of which are on the Table. One Act that is not there—perhaps because the Bill does not refer to it—is the Marine, &c., Broadcasting (Offences) Act 1967, which curtailed both our careers, Mr. Gale, at an early stage.
 Clause 1 sets the terms of the Bill. My hon. Friend the Member for Maldon and East Chelmsford—to whom, with your permission, Mr. Gale, and his, I will henceforth refer as my hon. Friend the Member for Maldon—has already said that the clause mentions many things relating to functions and general powers, but does not address sufficiently the promotion of competition. 
 One of the things that I welcomed about the Radio Authority and the Broadcasting Act 1996 was talk of a light touch. My hon. Friend referred to regulatory creep and there might be a considerable danger of that occurring if it were not for the views of Lord Currie. Regulatory creep must be avoided at all costs. Provisions on the promotion of markets should have been included in the clause. When we served—

Roger Gale: Order. I am sorry to interrupt the hon. Gentleman so early in his speech, but he will find that such markets issues are covered fairly comprehensively in clause 3.

Michael Fabricant: Thank you for that advice, Mr. Gale. I was looking earlier at provisions on the general duties of Ofcom and I wondered whether my remarks would be in order. I felt—maybe I am wrong—that the promotion of markets should have been referred to in clause 1 and perhaps repeated in clause 3. References to the general power and philosophy of Ofcom are made in clause 1, although they are addressed in greater detail in clause 3.

Roger Gale: Order. I pointed out to the hon. Gentleman that the provisions might well have been included in clause 1, but they were not.

Michael Fabricant: As the provisions are not included, it would be out of order to discuss them. If only they were included. There is a need to discuss the promotion of certain markets, although we will do that when we reach clause 3. I am concerned about that because of the penetration of broadband, but I shall discuss that in more detail when we reach clause 3.
 The most important thing is that it is accepted that the market is currently under extreme pressure, as my hon. Friend the Member for Maldon pointed out. I could refer to the telecommunications industry or, as my hon. Friend did, to the independent television industry but I shall not. I shall save time by referring to the state of the radio industry because radio, like television, has experienced a major fall in the amount of advertising that it carries. 
 It is interesting to look at the share values of two or three radio groups to see how they have changed during the past year. Capital Radio's 52-week high share price was 867.50p; it is now about 535p. The Chrysalis group, which operates the Galaxy radio stations, among others, had a high of 287p, but has fallen to 153p. GWR, which is well known to many hon. Members, had a 52-week high share price of 289p; the price has fallen to 121p. There is a great need for a regulator who will promote in the broadest possible way not only television, but radio and competition in areas such as telecommunications generally. 
 I have a specific micropoint for the Minister. I was confused by the explanatory note because clause 1—maybe it was clause 3—mentions the spectrum. Anyway, my hon. Friend the Member for Maldon mentioned the frequency spectrum. Pages 4 and 5 of the explanatory notes include mention of pre-commencement regulators. The notes say: 
''Those regulators are the Broadcasting Standards Commission, the Director General of Telecommunications, the Independent Television Commission and the Radio Authority.''
 However, the notes continue: 
''The expression does not include the Radiocommunications Agency, as the Agency is an executive agency of the Department of Trade and Industry and acts in the name of the Secretary of State, and although functions of the Secretary of State are transferred to OFCOM by the Bill, the office of the Secretary of State will not cease to exist, unlike the other four regulators.''
 I am not sure what that means in practice. If there is to be promotion and correct and optimal use of the spectrum, the agency primarily involved with that will be the Radiocommunications Agency. How will Ofcom be able to function if that agency acts completely separately from Ofcom? 
 One reason for setting up Ofcom is that it is recognised that, even if we do not have joined-up government, at least we have joined-up technology. Digital bits are digital bits whether they are used to broadcast television or radio or to carry thousands of telephone conversations down one fibreoptic line. If the Radiocommunications Agency is to be excluded from Ofcom's ambit, that is a major error that must be adjusted. When I saw a note being passed to the Minister, I hoped that an answer might be forthcoming. Perhaps one will arrive later, but if it does not, we must return to the matter. 
 My hon. Friend the Member for Maldon mentioned the introduction of 3G. That will be an interesting time. It will not be in great use with radiotelephony—telephone calls.

Andrew Lansley: Let me attempt to answer my hon. Friend's question. Clause 1 gives effect to the transfer of functions in clause 2, which includes those of the pre-commencement regulators and the relevant functions of the Secretary of State. Clause 390 defines the pre-commencement regulator as the four regulators referred to but not the Secretary of State. Only those functions of the Secretary of State specified in the Act under the Secretary of State's powers are to be transferred to Ofcom.

Michael Fabricant: I am grateful to my hon. Friend. In a way, I feel that he has a greater grasp of the Bill
 than the Minister or even the civil servants, but perhaps I am being unkind and uncharitable. However, although my hon. Friend has explained the meaning of the explanatory notes, he has not explained the mechanism whereby Ofcom will be able to optimise use of the frequency spectrum as well as it might do were the Radiocommunications Agency not an integral part of Ofcom.

Andrew Lansley: There is nothing in clause 1 that suggests that the powers and functions currently exercised by the Secretary of State through the executive agency—the Radiocommunications Agency—will not be transferred to Ofcom. Subsequent parts of the Bill will show how those powers are to be transferred to Ofcom. There is no deficiency in the powers available to Ofcom on spectrum management.

Roger Gale: Order. I am permitting this fascinating duologue to continue in the hope that we may obviate the necessity to return to the subject later.

Michael Fabricant: Thank you, Mr. Gale. I had better move on quickly to another topic in the hope that I may be allowed to return to the subject later.
 Some hon. Members have been contacted by the Communication Workers Union, which suggests that there should be greater accountability in the Bill. The union says that 
''In our view, regulators should be the instrument of policy and not the determinant of it.''
 I wholeheartedly disagree. As I said on Second Reading, the whole point of the Bill is to meet the need for a flexible architecture—the very point made by my hon. Friend the Member for Maldon. He said that when the 1990 Broadcasting Bill was enacted—

John Greenway: No, that was me.

Michael Fabricant: Oh, I apologise. It was my even more honourable Friend the Member for Ryedale.

Andrew Lansley: Equally honourable, perhaps?

Michael Fabricant: No, no. More honourable.
 My hon. Friend the Member for Ryedale made the powerful and eloquent point that the 1990 Act became almost obsolete within a year because of changes to technology. The Communication Workers Union suggests the slight change that Ofcom should make an annual statement, although I believe that that will happen anyway. My hon. Friend the Member for South Cambridgeshire, who has disappeared, might be able to point out where in the Bill that will apply. 
 I do not intend to speak at length about any of the clauses. The Office of Communications Bill was small, but this Bill is very large, and my hon. Friend the Member for Maldon has said that we need more time to debate all the clauses. I wish to pick out a few more key points from clause 1 and ask the Minister some specific questions. 
 Subsection (2) states: 
''OFCOM shall also have any functions in relation to telephone numbers that are conferred on them by the law of the Isle of Man or any of the Channel Islands.''
 Will the Minister tell us precisely what that means? Is there no standardised system in that area, such as the use of 07 numbers for mobile telephony, and why is the provision required in the clause? 
 I welcome subsection (5)(b), which says that Ofcom shall have 
''power to promote the carrying out of such research and development by others, or otherwise to arrange for it to be carried out by others''.
 I am reminded of the old Independent Broadcasting Authority's major engineering research facility at Crawley Court near Winchester, which was subsequently sold off and became NTL. That facility was a major force in developing compression technology for the transmission of television over a narrow digital bandwidth spectrum. That tremendously important work was done with the BBC at its research centre in Surrey, and it has been paramount to Freeview's operation. Thirty-two radio and television channels are now available, which would not have been possible if the research had not been undertaken. I welcome the fact that Ofcom will have the power to commission such research. 
 Subsection (8) states: 
''In this section 'telephone numbers' has the same meaning as in Chapter 1 of Part 2.''
 I have looked through chapter 1 of part 2, especially clause 28, which details definitions, but I saw no definition of a telephone number. We need to know what that is if the Minister is to answer the question about telephone numbers in the Isle of Man and the Channel Islands.

Kim Howells: What a fascinating debate.
 The Office of Communications Act received Royal Assent in March 2002. Some members of the Committee will remember the process, which was a long drawn out affair even though the Bill was short. That legislation allowed us to start the work of establishing Ofcom. The Act gave Ofcom a single function: preparing itself to take on its regulatory functions at a later stage, when the provisions in the Communications Bill come into force. 
 Clause 1 sets out the functions that Ofcom will receive. By virtue of subsection (1), they will comprise the functions transferred from the existing regulators and any other functions conferred on Ofcom under the Bill or other legislation. Under subsection (2), Ofcom's functions will include any conferred on it by the laws of the Isle of Man or any of the Channel Islands in relation to telephone numbering—the hon. Member for Lichfield wanted to know about that. That is because telephone numbers in those islands are part of the United Kingdom system, which will be administered by Ofcom, but the authority to do things in the islands must be confirmed by their own laws. Although clause 395(5) makes provision for this legislation to be extended to the islands, they may prefer to have, as they do now, their own legislation on networks and services. 
 Subsections (3) and (4) allow Ofcom to do anything that might be incidental or conducive to carrying out 
 its functions. That includes the power for Ofcom to borrow money, which no hon. Members have mentioned. I thought that someone would, which is why it is in my brief—[Laughter.] However, let me make it clear that should Ofcom wish to borrow money, it can do so only with the consent of the Secretary of State or in accordance with a general authorisation that she has given them in that regard. 
 Under subsection (5), Ofcom will be able to undertake research and development work in relation to any of its functions and arrange for others to carry out research.

John Whittingdale: I do not want to take the Minister back too far, but he expressed some regret that we had not looked properly at whether Ofcom will be able to borrow money.

Kim Howells: It was not regret.

John Whittingdale: Well, I do not want the Minister to feel that his brief was wasted. He said that borrowing will require the Secretary of State's consent. Is it the Government's view that borrowing by Ofcom will count towards the public sector borrowing requirement?

Kim Howells: Borrowing must certainly be controlled, and I can imagine that there will be some very adult conversations at the Treasury about it. There will be times, as the hon. Gentleman knows, when the income flows to Ofcom, especially from licence fees, will vary. Ofcom may well need to make use of borrowing power sometimes, to smooth out cash flow over a period of time. I emphasise that Ofcom will need approval or authorisation from the Secretary of State before undertaking any borrowing.
 We have previously given clear commitments that Ofcom will have a presence in the different nations of the United Kingdom, and we have agreed to the recommendation of the Joint Committee, which scrutinised the Bill, that there should be a requirement to underscore that commitment. I am glad that the hon. Member for Ceredigion welcomes the fact that that is in the Bill. However, I must tell him that I should not want to tie Ofcom down to meeting in Bangor, or even in Aberystwyth, before it meets in Pontypridd. It is a very pertinent point that Ofcom should not be seen as bound by the M25, or as a creature of the metropolis. It should have a vibrant working relationship with all parts of Britain. I am glad that the hon. Gentleman made that point. 
 We intend that, where appropriate, Ofcom should be able to contract out its functions to third parties. That is already the case with the Radiocommunications Agency, which contracts out certain functions to private companies. It is reasonable that Ofcom, too, should be able to do so. Subsection (7) provides for Part II of the Deregulation and Contracting Out Act 1994 to apply to functions conferred on Ofcom. Under that provision, the Secretary of State will be able to make an order to enable functions of Ofcom to be contracted to a third party. Under subsection (7)(b), those functions will include Ofcom's powers to make subordinate legislation except where exercisable by statutory instrument. That provision will allow Ofcom to 
 contract out, for example, the development of codes and standards. I hope that the Committee welcomes that. 
 I shall deal briefly with some points that have been made, especially the issue raised by the hon. Member for Maldon and East Chelmsford—it is important that we get East Chelmsford into the Committee record—in relation to the appointment of Lord Currie and the board of Ofcom. Lord Currie's appointment as chairman of Ofcom and the appointments of non-executive members of the board were made fully in line with the Nolan procedures for public appointments. Under that process, appointments are open and are made on merit. I hope that the hon. Gentleman accepts that. 
 I shall address another matter raised by the hon. Member for Whittingdale—[Laughter.] Did I say Whittingdale? I am sorry—the hon. Member for Maldon and East Chelmsford. Whittingdale is probably a village just outside East Chelmsford. The hon. Gentleman asked about the case for regulating mobile telephony and quoted Lord Currie's paper. As I am sure the hon. Gentleman is aware, Oftel's proposals for the revision of existing controls on mobile termination charges have been referred to the Competition Commission. I would like to answer his question, but it would be inappropriate of me to comment on the matter at this stage. I do not want him to think that I have missed the point he made, because it is important. 
 The issue of broadband was raised by the hon. Member for Ceredigion and others. There is no specific mention of broadband because the Bill is technologically neutral. We are committed to the roll-out of broadband across the United Kingdom, but we do not feel that it requires a specific mention in the Bill. The Bill is designed to put in place a framework that can respond flexibly to developments in technology, but it is not about one technology rather than another. However, I know how vital broadband is to constituencies such as that of the hon. Member for Ceredigion and, indeed, that of every other member of the Committee. 
 The hon. Member for Ryedale asked whether clause 1 gives Ofcom sufficient flexibility to deal with changing circumstances. We have endeavoured to make the Bill as technologically neutral as possible, which is why there is no express mention of either broadband or analogue switch-off. Clause 6 is directed towards self-regulation and allowing Ofcom to respond to changing circumstances. Clause 1, however, is written in the broadest possible terms, and any possible limitations on what Ofcom can do are best addressed when we come to the specific clause on the subject. That is a point that the hon. Gentleman made himself. 
 The Government have made a commitment to adhere to the criteria for analogue switch-off that were announced by my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), then Secretary of State for Culture, Media and Sport, in September 1999. They remain in place, and we continue to believe that switching off analogue 
 terrestrial transmission could start as early as 2006 and be completed by 2010. 
 We believe that a successful alliance between Government, industry and consumers within the framework detailed by the action plan will enable the United Kingdom to meet the criteria for switch-over laid down by my right hon. Friend in 1999. The Government made a commitment to adhering to those criteria. Switch-over is a complex and long-term process. I believe that a decision as important as that must lie with the Government, and they must be accountable to Parliament for making it. The hon. Member for Ceredigion makes an interesting point, but I hope that Parliament will see fit to debate the subject fully.

Simon Thomas: I thank the Minister for those comments. Is he saying that Ofcom, as the regulator, will not involve itself in deciding when an analogue switch-off should take place, and that only the Government will decide that? Could he also use as much leeway as you will allow him, Mr. Gale, to say a little more about how the Government will work with Ofcom, as the main regulator, to ensure that that does not penalise any part of the United Kingdom?

Kim Howells: My right hon. Friends the Secretaries of State for Trade and Industry and for Culture, Media and Sport will discuss those issues with Ofcom, and I am sure that during the course of those deliberations they will receive good advice. However, I do not want to commit either the Secretaries of State or the Government as a whole to saying that they will take a nod—or otherwise—from Ofcom on such an important matter. It is a broad subject that should be debated on the Floor of the House.

Andrew Robathan: I wish to make a genuine request. The Minister has twice referred to making the Bill technologically neutral, which relates to article 8 of the framework directive. I know that that is in the Bill, but I cannot find it. Will he tell me where it is stated?

Kim Howells: The hon. Gentleman can look for himself.
 As ever, the hon. Member for Lichfield made a fascinating contribution. I wish to supplement the brilliant answer—from which I learned a great deal—given to him by his hon. Friend the Member for South Cambridgeshire. The functions of the Secretary of State, exercised through the Radiocommunications Agency, will be transferred to Ofcom. The agency will cease to exist, but the Bill does not provide for it to cease to exist because it is not a statutory body. The hon. Gentleman made the same point in his intervention—I think. 
 Clause 1 provides a worthy description of what we intend to do, and I want it to stand part of the Bill.

John Whittingdale: I am mildly disappointed in the Minister's contribution. In answer to the points I made about the appointment of Lord Currie, he said that the Nolan principles had been followed. I never doubted that they had been and, as I said, I think that Lord Currie is well qualified to take on the post to which he has been appointed. However, it is the case that the
 Government have chosen to appoint as chairman of the regulator someone who expressed quite controversial views on the function of the regulator only a few months before he was appointed. That is a serious matter.

Chris Bryant: Has not the hon. Gentleman already answered his own point? This is a deregulatory Bill and the gentleman in question is a deregulatory gentleman, as his comments have made clear, therefore his appointment is a perfect fit.

John Whittingdale: It may well be a perfect fit, and I am sympathetic to many of the views that Lord Currie has expressed, but I am not the chairman of Ofcom. The Government knew his views, which refer to very important public policy issues, when they chose to appoint him to the post. I recognise that, to some extent, these matters fall under the responsibility not of the Minister but of his colleague, the Minister for E-Commerce and Competitiveness, so I am disappointed that that Minister is not present to respond to some of the points that have been made.
 Observers of this process, and those who wish to see how Ofcom will operate in the future, would be interested to know whether the Government appointed Lord Currie because they were sympathetic to his ideas. Are they sympathetic to the notion that there should be intervention to separate infrastructure, ownership and service provision in British Telecom, or did Lord Currie assure them that he had looked at that matter again and decided against such intervention? Do the Government have any views on an extremely important issue that affects the entire telecommunications sector?

Kim Howells: As a notorious deregulator and free marketeer, I was very pleased that Lord Currie was appointed as the chair of Ofcom.
 Question put and agreed to. 
 Clause 1 ordered to stand part of the Bill.

Clause 2 - Transfer of functions of

Question proposed, That the clause stand part of the Bill.

Andrew Lansley: I add my appreciation of the opportunity to serve on a Committee under your chairmanship, Mr. Gale. With the benefit of experience, I can say that as long as I stay in order it will be a pleasure.
 I shall detain the Committee for a minute in order to ask the Minister a number of questions. As will be a refrain in at least some parts of our discussions, I will be speaking in part about the questions and recommendations made by the Joint Committee and the Government's response. In some cases, however, there are loose ends and in others there are clearly differences of opinion. In this particular instance, I am pulling at loose ends. 
 The Joint Committee discussed the transfer of functions, powers and liabilities between the pre-commencement regulators and Ofcom. There is clearly provision for a transfer scheme for property and liabilities. At the time, however, we could not go into the provision to be made for the staff of the pre-commencement regulators, or indeed Radiocommunications Agency staff, who were to be transferred to Ofcom. We were led to believe that additional clauses would be added to the Bill, as indicated in paragraphs 3.7.1 to 3.7.3 of the Government's policy document. I am not aware that such clauses have been included in the Bill, and I wonder whether the Minister would indicate whether such clauses are likely to be added at a later stage. 
 The process of relating the structure of activity inside the pre-commencement regulators directly to the views of Ofcom can begin now that Ofcom has, to some extent, been appointed. It will allow the pre-commencement regulators to structure themselves, and the prospective Ofcom, in ways in which Ofcom would prefer. In that respect—this is a personal view, which was supported to some extent by other members of the Joint Committee—the Towers Perrin report was not wholly helpful. In particular, in so far as Towers Perrin looked at whether Ofcom should have clear, functional, outcome-related structures—for example, the function of an economic regulator as distinct from a content regulator, which is now reflected perfectly sensibly in the structure of the legislation—it discounted them in an unwarranted fashion in the way in which it structured its report. 
 We had to escape from the curious addition of a separate radio section to Ofcom in the Towers Perrin proposal, which treated radio as though it were not part of economic and content regulation and the concept of a converged regulator did not apply to it. The Joint Committee said that that was perverse, and the Government happily agreed. It is important that the pre-commencement regulators should not be constrained by the presence of a consultant, and I wonder whether the Minister will confirm that they are escaping from some of the constraints with which they started. 
 That brings me to my principal question, which relates to the use of powers in the Office of Communications Act to try to secure the most advantageous introduction for Ofcom. As one can see in clause 2, Ofcom will clearly take over functions where the events that it will be regulating will predate its assumption of those functions. So far as we can achieve it, those who are regulated should both recognise that Ofcom is a distinctly new regulator with a new approach and culture and, in so far as they have been operating under the prior regulatory regime, know the basis on which they are being regulated. The pre-commencement regulators have their own pre-existing cultures and there will be big shift to the new culture, but some of Ofcom's regulatory actions will have to relate to that prior period, which is a curious combination. The key is to be found in section 2 of the Office of Communications Act on Ofcom's initial function, to which the Minister referred, which is about making statements on its intentions in relation 
 to its use of its powers. Section 4 places upon the pre-commencement regulators a duty to carry out their functions in a manner that appears to them to secure that Ofcom will be able effectively to carry out its functions—its initial function and the functions that will be given them under the Bill and other proposals. 
 It is interesting that the Government, when responding to the Joint Committee report recommendation that those powers should be strengthened, made clear their view that there was nothing to prevent Ofcom publishing such statements of intention. That is fine; that answers the question perfectly well. However, the Government's response went on to say: 
''so there is no impediment under the provisions of section 4 of the Act to the existing regulators having regard to any such statement OFCOM may make in fulfilling their functions before they are transferred to OFCOM.''
 My point is what is the extent of the obligation on the pre-commencement regulators? If Ofcom makes a statement about its future intentions under section 2 of the Office of Communications Act, and many of us would wish it to do that at an early stage, is it not the case that under section 4 the pre-commencement regulators have a duty to follow that through and to try to secure that Ofcom's intentions are carried into effect by using their existing powers before Ofcom takes over—to the extent that they are legally able to do so within their existing statutory obligations? 
 It seems to me that there being no impediment to the regulators having regard to Ofcom's statement is not good enough. We should make it clear that we would encourage Ofcom to make such statements as early as possible and that the pre-commencement regulators, within their statutory limitations, have a duty to act in accordance with those statements of intention. Otherwise, we will have a period of confusion; it may last a matter of months only, but it is perfectly clear that although the legislation may be passed in June or July next year Ofcom may not be able to take up all those principal functions until the later part of 2003.

John Whittingdale: May I add to what my hon. Friend says? He flags up a genuine concern. It relates to a fairly limited time scale. The pre-commencement regulators will continue to operate, but with the prospect of Ofcom being already established and with a board already in place sitting and waiting to take over. We have already seen that some of the pre-commencement regulators have started to be influenced by the knowledge that their lifespan is coming to an end. In one case at least that I know of, that has caused them to say that they will not consider any more franchise applications because Ofcom will be taking over that responsibility before too long. In other cases, decisions may be taken by pre-commencement regulators when it is perfectly clear that Ofcom may reach different decisions soon afterwards. It would help if the Minister could say a little about the timing, and when he envisages Ofcom coming into effect and taking those powers.
 I note that clause 2 provides that the Secretary of State may appoint different dates for the different purposes of Ofcom. I am not entirely sure why that 
 should be the case. What particular examples can the Minister provide of why one particular function might come into effect earlier or later than another. Will he clarify those points?

Kim Howells: Since it was established earlier this year, Ofcom has been making preparations to assume its regulatory functions once the Bill's provisions come into force. That is why we passed a paving Bill, and I think that it was right and proper to do that.
 Clause 2 will cause the functions that are currently carried out by the existing regulators to be transferred to Ofcom. Those functions are set out in schedule 1 and relate to wireless telegraphy, the licensing of television and radio services, the Channel 4 corporation, Gaelic broadcasting, which we have not mentioned so far, the national television archive, and the prescription of foreign satellite services. 
 The schedule includes functions that relate to entering and searching premises to enforce broadcasting licence provisions, the variation of existing licenses for Channel 3 and Channel 5, reviewing digital television broadcasting, the reservation of digital capacity to the BBC, listed events and fairness and privacy in broadcasting. Taken together, clause 2(1) and Clause 395(2) enable the Secretary of State to determine a date on which the functions to which the clause relates should be transferred to Ofcom. Under clause 395 the Secretary of State can set different dates for different purposes. That matter was raised by the hon. Member for Maldon and East Chelmsford. Those provisions would allow different functions, or even different aspects of the same functions, to be transferred to Ofcom at different times. 
 As a consequence of clause 2(2), references that are made in current legislation to the existing regulators should be read as if they referred to Ofcom. Subsection (3) will allow Ofcom to exercise the functions that are transferred to it in respect of incidents, such as a breach of a licence condition, that occur before those functions are transferred. Subsection (4) provides that the functions that are transferred to Ofcom include any modifications made by Bill. 
 The hon. Member for South Cambridgeshire asked a sensible question—what will happen to the staff? That is an important issue, because if there is doubt and uncertainty, staff might drift away. Many people on the staff are very skilled and vital. Subsection (2)(b) will apply via an order under the Employment Relations Act 1999, which has been published in draft and is in the House of Commons Library. As we are using existing powers to deem subsection (2)(b) to apply, staff will transfer to Ofcom with their existing terms and conditions under a section 38 regulation of the 1999 Act, rather than through a transfer scheme under the clause. I am sure that the Committee will welcome the protection for staff and their employment rights on transfer.

Michael Fabricant: The Minister has raised an interesting issue. I know that there is huge uncertainty among Radio Authority staff about
 whether they should be seeking other jobs. The Minister has, to some extent, addressed that, but will he clarify whether all employees of the various agencies that will be encompassed in Ofcom—the RA, ITC, Oftel and so forth—will automatically be employed by that body?

Kim Howells: No. They may make applications for jobs and some would not, I am sure, want to transfer. We cannot tie Ofcom to saying that it will be exactly the same size as all the existing agencies combined. It is important that the new organisation should be a new creature and should address the matter of regulation in a fast-changing environment. The hon. Gentleman often made that point during the passage of the Ofcom Bill. The answer is no.
 To return to the issues that were raised by the hon. Member for South Cambridgeshire, copies of the executive summary of the Towers Perrin report have been deposited in the Library of the House of Commons. That contains recommendations only, and it will be for the Ofcom board to make its own decisions on matters such as staffing. 
 The hon. Gentleman also asked whether existing regulators should be under a duty to act in accordance with Ofcom's statement of intention. Clause 27(1) provides for the pre-commencement regulators to take steps to enable Ofcom to carry out the functions transferred to it under the Bill. 
 The hon. Member for Maldon and East Chelmsford asked about different dates. As hon. Members will be aware, detailed planning currently under way between Ofcom and the existing regulators means that we must implement telecom directives by 25 July. Ofcom may take a lead in that ahead of other powers, but that is a matter for detailed planning. I hope that he will accept that point. 
 Question put and agreed to. 
 Clause 2 ordered to stand part of the Bill. 
 Schedule 1 agreed to.

Clause 3 - General duties of OFCOM

Andrew Lansley: I beg to move amendment No. 1, in
clause 3, page 3, line 3, leave out subsection (1) and insert— 
 '(1) It shall be the principal duty of OFCOM to further the interests of consumers in relevant markets, where appropriate by promoting competition. 
 (1A) It shall further be the duty of OFCOM, in carrying out their functions— 
 (a) to secure the optimal use for wireless telegraphy of the electro-magnetic spectrum; 
 (b) to secure the availability throughout the United Kingdom of a range of television and radio services which (taken as a whole) are of high quality, sufficient to appeal to a variety of tastes and interests, and of a plurality of views sufficient to meet the diverse interests of citizens; and 
 (c) to secure that standards falling with subsection (2) are applied in the case of all television and radio services.'.

Roger Gale: With this it will be convenient to take the following:
 Amendment No. 150, in 
clause 3, page 3, line 3, at beginning insert— 
 '( ) It shall be the principal duty of OFCOM to promote and further the interests of consumers and citizens.'.
 Amendment No. 195, in 
clause 3, page 3, line 3, leave out subsection (1) and insert— 
 '(1) It shall be the principal duty of OFCOM in carrying out their functions— 
 (a) to further the long-term interests of all citizens— 
 (i) by ensuring the availability of a diversity and plurality of high quality content in television and radio; 
 (ii) to secure that standards falling within subsection (2) are applied in the case of all television and radio services; 
 (iii) to secure the optimal use of wireless telegraphy of the electromagnetic spectrum; and 
 (b) to further the long-term interests of consumers by promoting the efficiency of electronic communications networks and services, and broadcasting 
 and to do so wherever possible by promoting effective competition in national, regional and local communications markets throughout the United Kingdom.'.
 Amendment No. 151, in 
clause 3, page 3, line 3, after 'the', insert 'further'.
 Amendment No. 130, in 
clause 3, page 3, leave out lines 4 to 13 and insert 'to further the interests of consumers and citizens— 
 (a) wherever possible by promoting effective competition; 
 (b) by securing the optimal use for wireless telegraphy of the electromagnetic spectrum; 
 (c) by securing the universal availability of a wide range of diverse and high quality communications services throughout the United Kingdom; and 
 (d) by securing standards falling within subsection (2) which are applied in the case of all television and radio services.'.
 Amendment No. 29, in 
clause 3, page 3, line 4, leave out 'where appropriate by promoting competition'.
 Amendment No. 124, in 
clause 3, page 3, line 13, at end insert—
'(e) to secure, so far as practicable and in the manner that best takes account of the need to protect personal data, in order to protect copyrighted content, and to empower parents to protect children from harmful content, that open standards for technological security systems are established and implemented.'.
 Amendment No. 127, in 
clause 3, page 3, line 13, at end insert— 
 '(e) to protect and promote the interest of citizens.'.
 Amendment No. 27, in 
clause 3, page 3, line 13, at end insert 'and in carrying out their functions, OFCOM shall have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed'.
 Amendment No. 196, in 
clause 3, page 3, line 20, at end insert— 
 '(2A) In performing their duties under subsection (1), OFCOM must observe the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.'.
 Amendment No. 48, in 
clause 3, page 3, leave out lines 21 to 23 and insert— 
 '(3) It shall also be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to comply with the principles of good regulation, namely that regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed. 
 (3A) Subject to subsection (3), it shall be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to have regard in particular to such of the following as appear to them to be relevant in the circumstances—'.
 Amendment No. 153, in 
clause 3, page 3, leave out lines 21 to 23 and insert— 
 '(3) It shall also be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to comply, except where issues of national security preclude compliance, with the principles of good regulation, namely that regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed. 
 (3A) Subject to subsection (3), it shall be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1) to have regard in particular to such of the following as appear to them to be relevant in the circumstances—.'.
 Amendment No. 46, in 
clause 3, page 3, line 24 after 'promoting', insert 'long-term and sustainable'.
 Amendment No. 152, in 
clause 3, page 3, line 24, at end insert— 
 '(aa) the rights of the citizen to access services which inform, educate and entertain;'.
 Amendment No. 28, in 
clause 3, page 3, line 25, leave out paragraph (b). 
Amendment No. 47, in 
clause 3, page 3, line 32, after 'encouraging', insert 'long-term and sustainable'.
 Amendment No. 125, in 
clause 3, page 4, line 3, at end insert— 
 '(n) the desirability of open standards for technological security systems to prevent unauthorised use of personal data and copyrighted content.'.
 Amendment No. 131, in 
clause 3, page 4, line 6, leave out 'and value for money' and insert 'value for money, universal access, fairness, information and redress'.
 Amendment No. 34, in 
clause 10, page 10, line 30, at end insert 'and'.
 Amendment No. 35, in 
clause 10, page 10, line 34, leave out from 'put' to end of line 37.
 I reiterate that I am quite prepared to have a comprehensive debate at the start of discussion on the clause, but if so there will not be a stand part debate.

Andrew Lansley: As I said a moment ago, part of my purpose will be to suggest to the Committee some issues that were not properly resolved by the Government's response to the joint scrutiny committee. Among those, perhaps the most important is the question of the structure of general duties. The Minister knows how important that is. During the proceedings of the Committee that considered the then Utilities Bill, he said that general duties lie at the heart of the regulatory process. They set the framework in which regulators exercise their functions under the Acts. That is clearly true in
 relation to the Bill as much as it was to that legislation. My hon. Friend the Member for Maldon and East Chelmsford rightly referred to the questions that have arisen over the years about how regulators have interpreted their general duties, or felt obliged to do so in order to secure their objectives most effectively.
 A principal difficulty that Ofcom faces is the breadth and complexity of the duties placed on the regulator. Not only is a range of duties set out in clause 3(1) and (2), but a range of factors to which regard has to be shown is set out in clause 3(3), some of which take the character of additions to the duties rather than factors as such. We will go on to debate the extent to which they should be characterised as duties rather than matters to which Ofcom must have regard. In practice, they add to the complexity of the range of objectives that Ofcom needs to meet. 
 The duties do not stop there. I will not go on about it at length, but clause 4 gives a range of duties related to Community legislation, some of which stand in a prior position, so Ofcom has a requirement to meet those above and beyond any other duties. When we get into subsequent parts of the Bill, there will be duties in relation to the wireless telegraphy spectrum, which amplify on the optimal use issue, and so on. The complexity of Ofcom's duties is a characteristic of the regulatory issue, and, if anything, goes substantially beyond most other regulatory Acts or the establishment of regulators seen in recent years. 
 It has been clear that one of the ways in which one can deal with the issue is to ensure not only that those duties are as clear as one can make them, but that, wherever possible, Parliament states its intentions as to the manner in which those duties are to be considered, one against another.

Michael Fabricant: I follow where my hon. Friend is going, but I want to question him. He says that the primary purpose of the amendment is to promote competition, from which much will flow. Does he believe, for example, that the Radio Authority is wrong—I do not think that it is—to say that in a given region it seeks diversity, rather than competition? The point applies throughout the United Kingdom, though in the west midlands, for example, where there is a pop radio licence, it might look for, say, a black rock type radio licence—something that is different, but not competing, in order to give diversity. Would not that be in conflict with the new subsection (1) proposed in the amendment?

Andrew Lansley: I appreciate my hon. Friend's intervention, because it gives me an opportunity to describe the structure of the amendment, in relation to a reasonable example of the way in which it works. By way of clarification, I should say that my objective is not for Ofcom's principal duty to be the promotion of competition, even though that is the first community requirement in relation to telecommunications. The principle duty of Ofcom is to further the interests of consumers. It is simply an observable fact that the best way of promoting the interests of consumers is to allow competition to deliver, in circumstances in which it is appropriate to do so. The best interests of consumers are normally met by the presence of effective competition. To be clear, I do not simply
 structure the amendment around a pro-competitive approach.

Chris Bryant: This is a matter of quite substantial concern to people who would like to see broadband services delivered across the whole of the United Kingdom, but are frequently told by BT that competition law prevents them from bringing broadband to individual exchanges, until such time that they can prove they are not subsidising them. That means that in some exchanges, 600 people must be registered before broadband can be introduced. Does the hon. Gentleman think either that what BT says might not be true, and that competition law does not force it to do that, or that there are situations in which competition law and the needs of competition might conflict with the needs of consumers?

Andrew Lansley: I am stacking up a series of examples that I will try to work through. If the Committee will forgive me, I shall try to work with two examples, to illustrate the point of the amendment. In relation to the examples that my hon. Friend the Member for Lichfield and the hon. Member for Rhondda mentioned, it may not necessarily be the case that competition will deliver the desired outcome. Notwithstanding that, however, does one regard competition and furthering the interests of consumers through competition where appropriate in the same light as a duty of Ofcom that may subsequently be specified, or is there a principal duty for Ofcom to promote competition?
 On the point made by my hon. Friend the Member for Lichfield, it is true that the amendment takes forward the structure of legislation, which says that one of the objectives—or duties—is to secure a variety of television and radio services is to secure a variety of television and radio services to satisfy a wide range of tastes and interests. I have added 
''a plurality of views sufficient to meet the diverse interests of citizens''
 because those are not reflected in the present structure of general duties, which implies that there are some specific circumstances in which competition will not necessarily deliver them. If it were true that competition can in all circumstances deliver radio and television services that meet the variety of tastes, or diversity of views, of consumers and citizens, we would not need an additional duty. If competition could deliver that, competitive markets would suffice. 
 My hon. Friend has already referred to the point that each regulator has to think hard about the manner in which it pursues and achieves objectives—that is true of the Radio Authority today. During the discussion on the draft Bill, one of the continuing themes that the Joint Committee had to address was the extent to which the regulator would deal with an issue by the application of licence conditions, ex ante regulations and, in the case of the Radio Authority, format controls. The regulator might also want to move towards competition. If that were so, we will want to know what competition gives us. Is 
 competition able to meet the interests of consumers and citizens that we want it to? 
 The balance between ex ante regulation and competition regulation is at the heart of the Bill. For both telecommunication and broadcasting, the objective of the legislation is to move the new converged regulator towards the pursuit of competition to a far greater extent than was the case for the pre-commencement regulators—including Oftel, until it made its statement four or five months ago. If we want the regulator to take an essentially pro-competition stance to deal with issues relating to emerging markets, and to future-proof the legislation against technology and market changes, let us make that clear in the structure of general duties and leave the set of specifics to flow from that. 
 I shall respond to the question raised by the hon. Member for Rhondda, because broadband is interesting in this context. We might not discuss the specifics of that later so it is important to consider them now. As the hon. Gentleman said, the use of ex ante regulations versus the use of competition powers is at the heart of one of the issues relating to broadband. As the Joint Committee observed, for two years Oftel pursued the route of ex ante regulation: 37 directions and determinations were given by Oftel to BT to secure local loop unbundling. I might over-characterise the situation, but essentially it did not happen because BT said that things would not work out like that. An aggressive view might suggest that BT was saying that it had failed to control the market with a mechanism by which other competitors were not able to offer broadband services, so it now wanted to move to the other option: cutting prices. 
 There are two ways in which one can exercise market dominance. One is foreclosure by technology, which is essentially what happened in the first place. The other is foreclosure by market power. Subsidisation of the wholesale offer of broadband by BT will lead to a much greater market penetration of broadband, but not necessarily to competition. It is not satisfactory for the regulator to be constantly nipping at BT's ankles, while BT is deciding for itself at which point it will stop providing services to people by putting in a second telephone line and offering them broadband access. That will not deliver a competitive market. Ofcom will have to pursue the issue through the competitive route—happily, at least today, I do not have to examine precisely how it will do so. That means that the reduction in wholesale costs that BT has offered to broadband is absolutely right, but the extent to which that places BT is in a position of dominance in relation to the retail supply of broadband then becomes a wholly separate issue. If we can reach the point where broadband has not only a low wholesale, but a low retail cost, there is no reason why it should not achieve a much larger penetration.

Kim Howells: The hon. Gentleman gives a brilliant exposition of the dilemma that has faced Oftel and BT. He seems to be describing something that has been carved out of a very peculiar history, and I rise, really, in enthusiasm for his remarks. Through the Bill, we must change history to ensure that those mistakes do
 not recur and that we construct a regulatory framework that ensures both competition and the opportunity for new entrants and real entrepreneurial spirits to make an impact on the scene.

Andrew Lansley: Rewriting history is not given to us to do, but we can write a new kind of pro-competitive opportunity for the future. I am grateful for the Minister's comments, but I shall not follow him too far in criticising the past. I speak as someone who was involved in the Telecommunications Act 1984 and BT privatisation as an official at the Department of Trade and Industry. If we had only realised what competitive opportunities existed, we would perhaps have gone much further, but it seemed bold at the time. The idea of RPI minus one seemed bold to BT. We put RPI minus three into the original formulation, and I think that we got as far as RPI minus 12. We put Mercury alongside BT as a competitor, but perhaps we should have been much bolder at an early stage and thought in terms of a range of competitors. As my hon. Friend the Member for Maldon and East Chelmsford said, there was probably a point, perhaps in the mid–1990s, when the market, technology and opportunities to introduce competition existed, but they were not taken. Instead of allowing Mercury to lose its competitive position against BT, we should have created opportunities for new entrants to the market. Now, that will happen anyway, because of the presence of mobile phones. Plenty of people have given up on BT's fixed line system and use only mobiles. We shall arrive at some pretty competitive circumstances in any case, but we want a regulator who will promote that rather than otherwise. The hon. Member for Rhondda asked how it would do that. The answer is that I do not know. I do not know the extent to which broadband will be available to people merely as a consequence of the application of competition. I do know, however, that we will get quite a long way down that path, and that if there is a residual issue—as there always was with fixed telephony—there may one day be a need for universal service obligations for broadband.

Chris Bryant: The issue concerns people in many constituencies. I am worried that moving away from the universal service obligation—the oldest form of ex ante rule—to rely solely on competition law may disadvantage the most disadvantaged areas of the country as regards broadband. That is a difficult Gordian knot to cut through.

Andrew Lansley: The hon. Gentleman is right—it is difficult. I do not dispute that by its nature Ofcom will have to consider the extent to which competition is able to deliver the needs of consumers, but it will not be able wholly to do so. That is implied by the structure of Community legislation, the first requirement of which, as reflected in clause 4, is the promotion of competition. It is stated rather more baldly there than it is in my amendment. The structure of Community legislation entirely accepts that where competition cannot deliver, conditions will be applied. That includes the structure of conditions under the universal service directive. The promotion of competition and universal service obligations are not
 mutually contradictory. It is a question of where one strikes the balance between the two.

John Whittingdale: I have a brief observation. My hon. Friend the Member for South Cambridgeshire began his remarks by saying by raising one of the most important issues that we face. He was not sure if he would have another opportunity to do so. If it appeals to you, Mr. Gale, when you look at the amendments, the reason that we have drafted an amendment concerning the universal service obligation to consider broadband is not because we think that that is the answer—I am not persuaded that it is—but it is essential that we should have a proper debate about broadband.
 My hon. Friend made the observation that there is growing competition from the mobiles to fixed line telephony. That is correct for voice messaging. However, on the crucial issue of data I hope that we will get to the position when mobile technology can offer fast downloading of data. That depends on 3G, which I hope will happen, but does not seem to be an immediate prospect. For the moment, fixed line systems will be the main providers.

Andrew Lansley: I am grateful to my hon. Friend. I think that I have talked enough about broadband, which I used as an example to illustrate the purpose of the amendment. If there are substantial issues relating to broadband, there may be later and better opportunities to raise them.
 I will explain the structure of amendment No. 1. I propose to speak to that amendment only because none of the other amendments are in my name—although I support some of them. Amendment No. 1 is not set out precisely in the terms of the recommendation of the Joint Committee. Amendment No. 195 is in those terms, but although I regard with affection the consensus reached by the Joint Committee, that does not mean that it wholly reflected my view in every circumstance. It always seemed to me—if the hon. Member for Milton Keynes, North-East (Brian White) will forgive me—that the defect of amendment No. 195 is that it represents a range of duties as the principle duty of Ofcom. To that extent, it does not present the hierarchy of duties to a sufficiently desirable extent. I am essentially looking to understand, and reflect in the general duties clause, the primacy of competition as a means of delivering benefits, while recognising that there are a range of specifics that act as constraints, which we must deliver if competition is not competent to do so.

Michael Fabricant: My hon. Friend said earlier that he was seeking to ''future-proof'' the Bill through the amendment, but does he accept that he is being a little too forward looking? In order to allow competition to achieve the consumer benefits that he wants, the means by which the services are delivered should be various and include broadband, radio or whatever. Does he think that he is being a bit too futuristic when there are only limited channels—I use the word channel in the broadest meaning of the word—in seeking to allow competition, whether it be in broadband, radio, television or other market segments in any given area?

Roger Gale: Order. We have now had two rather lengthy interventions. Can I say to the Committee that interventions are exactly that, not speeches? We must try and keep them brief.

Andrew Lansley: Thank you, Mr. Gale.
 The short answer to my hon. Friend is no. I do not think that I am being too futuristic. In all of the markets with which we are dealing, competition is present to a greater or lesser extent. In most of them, the possibilities of arriving at a much more efficient competition solution are already there. As we shall discuss later, it would be better if we were to pursue a competition solution, even in relation to many of the media markets, rather than the application of prior controls and rules on media ownership. 
 The purpose of setting out the principal duty in new subsection (1) is to set out the hierarchy of duties and to make the first such duty the furtherance of interests of consumers through competition. That would not remove any of the other duties.

Roger Gale: Order. The Committee will sit again at 4.30 in Committee Room 14, with Mr. Atkinson in the Chair.
 It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Four o'clock.